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Advance Data Requirements for E-Commerce Shipments to be Tested

Tuesday, July 23, 2019
Sandler, Travis & Rosenberg Trade Report

U.S. Customs and Border Protection has announced that starting Aug. 22 it will conduct an approximately one-year test under which additional data elements for Section 321 goods will be transmitted in advance of their arrival. CBP states that it is conducting this voluntary test to determine the feasibility of requiring advance data from different types of parties and requiring additional data that is generally not required under current regulations in order to effectively identify and target high-risk shipments in the e-commerce environment.

Section 321 of the Tariff Act of 1930 provides for an administrative exemption from duty and taxes for shipments of goods (other than bona-fide gifts and certain personal and household goods) imported by one person on one day having an aggregate fair retail value in the country of shipment of not more than $800.

CBP states that about 1.8 million shipments qualifying for the Section 321 exemption are currently arriving each day, primarily by air and truck, but that the agency is not receiving adequate advance information to assess the security risk of these shipments while still maintaining the clearance speeds the private sector has come to expect. This is particularly true in the e-commerce environment, where traditionally-regulated entities such as carriers are increasingly unlikely to possess all the information on a shipment’s supply chain.

With the expectation that Section 321 shipments will continue to grow exponentially, CBP is initiating the Section 321 Data Pilot to test the feasibility of (a) obtaining advance information from regulated and non-regulated entities, such as online marketplaces, and (b) requiring additional advance data elements that identify the entity causing the shipment to cross the border, the product in the package, the listed marketplace price, and the final recipient (specific data elements will vary somewhat depending on the transmitting entity). CBP states that it will use this advance information to improve its ability to identify and target high-risk shipments, including for narcotics, counter-proliferation, and health and safety risks, but will not use it for entry or release purposes.

The pilot will apply to each Section 321 shipment destined for the U.S. and arriving by air, truck, or rail for which the participant has information. It will operate in all ports of entry utilized by the participants for Section 321 shipments. It will not apply to any mail shipments covered by 19 CFR 145, shipments arriving by ocean, or shipments designed for a foreign-trade zone.

Pilot participants will be selected from eligible applicants engaged in e-commerce, including carriers, customs brokers, and freight forwarders, as well as online marketplaces, regardless of whether they offer delivery logistic services.

After the end of the pilot CBP will determine whether to (a) extend and/or expand the pilot or (b) make additional advance reporting requirements mandatory in the e-commerce environment.

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